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Skyworks has been making progress in expanding its solutions in new devices, but the company remains heavily dependent on the smartphone market -- and Apple as a customer in particular. The maker of wireless connectivity chips still counts on Apple for over 40% of its sales, and news that the tech giant's mobile hardware is seeing softer demand has weighed on the chipmaker's outlook.

Image source: Getty Images.

So what

Skyworks delivered record sales and earnings performance in 2018, but sell-offs for the broader stock market in the year's last quarter, a weakened outlook for premium handsets, and slower than anticipated development for emerging product categories pulled the stock to the neighborhood of a three-year low in December. As a result of headwinds stemming from mobile slowdown and the Chinese market, management is guiding for first-quarter revenue to decline 4% year over year and adjusted earnings per share to fall by 5%.

Now what

Expanding into product categories such as wearables, connected cars, smart-home devices, and industrial Internet of Things solutions continues to be a top priority for Skyworks, but the company's overall performance will be pressured by the mobile slowdown in the near term. Expertise in connectivity chips positions it to be a potential winner from Internet of Things and 5G tech transitions, but some investors might be less willing to wait for these stories to develop as the core of the company's current business remains under pressure.

Despite headwinds and expectations for comparable sales and earnings declines in the first quarter, management's guidance projects that the company will once again record sales and earnings growth this year. Skyworks stock trades at roughly 10 times this year's expected earnings and 3.2 times expected sales.